World inflation is calculated at over 10 percent per year, although in Mexico it has remained far from other countries, but in reality, does it affect our work? Are these times of recession in marketing?
agencies of marketing in the pandemic
Many have already talked about this. But I join this topic. The pandemic came to renew the way we work at all levels. From transnational companies as large as Google or Tesla, to our agencies of Marketing. Many agencies had to resort to a hybrid system to continue operating. Many others turned to home-office and just a few weeks ago we returned to normal.
Although there were many agencies, mainly BTL and ATL, that had a significant drop in billing volume, one of the jewels that saved many was their digital department. The pandemic revolutionized some things, one of them was the digital acceleration of SMEs, some companies and users in general.
Just to put it in context, before the pandemic, it was calculated that Mexico would be the region in the world with the highest increase in e-commerce of the world. After the pandemic, the entire Latam region grew at almost the same rate, which means that everyone understood and hung their business on their e-commerce.
Crisis? What crisis?
In general, according to Milenio data, during 2020, 64 percent of companies modified their advertising investments in order to reduce them to face the issue of the pandemic. Further on, Cristina Ochoa affirms, last year’s data confirm that the services of Creativity and Strategy and Media Management continue to be the strong share of the digital offer.
So my reflection at this point is: will we face a crisis at the agency level?
Maybe I’m too young to remember the global crisis of 2008 or at least I haven’t worked in this medium yet. But I do remember when a large part of advertising investment was stopped between 2018 and 2019 in Mexico due to the change of government. It is estimated that there was a decrease in investment of up to 8% in general.
Without getting into political artificers, it is the closest I have come to facing a crisis or, at least, such a strong contraction in advertising investment.
But part of the industry in general was affected. Many clients tied up their investments well into 2019. In this sense, it would perhaps be a general reflection of how a large-scale recession could impact our industry.
The digital world, the most strengthened
Many of the investments have been migrating to digital over the years. And with it, all the productions, creativities, media implementation have also migrated there. Perhaps the most typical case is digital investment vs open TV and how it has lost a lot of influence with the younger generation.
At least now, after a global pandemic, we know that digital will remain relevant and will continue to grow in terms of e-business and the annual investment. Only towards 2021 it grew 30.5% and in 2022 it grew 13.5 percent. While open TV was reduced by 35 percent the previous year.
An important point to keep us current is to create services for the entire digital industry in general, since it has been digitized as a result of the global trend.
Will the issue of inflation and the global recession impact our industry?
I think whoever can answer this question will be worthy of a Fields medal or a Nobel prize, I suppose. Although I believe that we should prepare for all scenarios. And most importantly, attend to diversify the services that we have in our agencies. If we are entirely a creative agency, you must turn the world of BTL around by crossing over with digital. Or open an arm towards production. Or open your digital department, which, by the way, is the one I see with the greatest stability in the years to come.
We have to wait for the figures and the movement towards the last Q’s of the year and the first of 2023 to confirm or deny what the forecast will be like, but the best we can do at this point is to diversify our agency.
And prepare for the recession that is coming -if it reaches us-.